Saskatoon real estate: Week in review (May 4-8 2009)

Following a few pretty encouraging weeks, sales of detached houses and condos stumbled, new Saskatoon real estate listings spiked to their highest point this year, and total active residential listings reached a new high for 2009.

New listings of detached houses and condominiums broke the one hundred and fifty mark for the first time this year, falling just short of two hundred, as Saskatoon home sellers offered up one hundred and ninety-six new listings to the Multiple Listing Service. While new listings came in sixty units higher on a week-over-week basis, fifty-two fewer homes were offered for sale when compared to the same week last year, which was the peak listing week for 2008. Condos saw the largest increase as the inventory grew from four hundred and eighty-six at the close of business last week to five hundred and twenty-two units today. Detached houses increased from eight hundred and sixty-five to eight hundred and ninety-three over the same period and total active residential listings broke the fifteen hundred mark for the first time this year to finish at 1,507.

Click the image for a larger version of the graph.

Price changes doubled over last week as ninety-five Saskatoon homes sellers adjusted their MLS listing. Additionally, eleven of thirty-seven cancelled and withdrawn listings re-appeared on the system, most at a new price. At the same time, two of our three price measures showed continued upward strength while the third, the weekly average, fell about $500 from the week before. A pretty skinny gain to the six-week average selling price brought its fifth consecutive week of growth and saw it reach $277,295, it’s highest point since late February, but about 8.75% lower than it was during the same week last year. The four-week median took its fourth consecutive week of gains to finish at $270,000, its highest point for 2009, just $7,250 lower than it was last year at this time.

Click the image for a larger version of the graph.

The average underbid was slightly higher than last week at $13,278 or roughly 4.5% of asking price. Once again, a few sellers managed an above list-selling price, but all three were new homes that may have included additional value to justify the increase. Larger underbids were certainly more common as the percentage of homes selling within $10,000 of the asking price slid back to just fifty-two percent. More commonly, that category ranges from sixty to seventy percent, so buyers did some hard grinding this week and sellers seem to have taken it.

Meanwhile, Saskatoon real estate agents continued to report that they’re “busy,” and I have to say we’ve been feeling that way too but if you want to measure performance with the true measuring stick of productivity (sales), you can clearly see that we’ve had three consecutive weeks of declining productivity. It’s true that this year’s sales line on our little graph looks a lot like last year’s, but remember, sales were actually falling off of a cliff last year at this time. May of 2008 brought us just 367 residential units sales, down from 580 the year before, and returning us to what us real estate types like to call “normal” ranges of sales. If there is the slightest bit of heat returning to this real estate market it will have to show up in next week’s numbers as pending deals move from conditional to firm. If it’s another week like this one, we’ll have a hard time putting together a month of May that is close to normal. It’s still early and the numbers could be there, but with just seventy-three firm sales so far in May, we are off to a bit of a slow start.

See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @Norm_Fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate

Comments

  1. crikey, interesting article

    Saskatoon prices should be expected to fall more you would think as they are currently the highest in the province and Saskatoon seems to have been the most over built and have the largest inventory of any Saskatchewan market

    If Saskatchewan prices are down 2.7% it seems Saskatoon prices should be down at least twice that much.

  2. Al,

    Sales before prices, yes?

    Price of homes expected to fall

    http://tinyurl.com/qaysc3

  3. The roller-coaster ride keeps going…..but folks we are on the upward swing as we speak.

  4. San Diego Home Seller says:

    Keep the faith… The San Diego, CA real estate market was one of the first to take a dive in the U.S. Back when you were posting about price appreciation at the beginning of 2007 we had already headed into our major correction period. So we are at least a year or two ahead of you. But recently in San Diego homes have been selling much more quickly. Entry-level houses priced under $350,000, particularly bank foreclosure properties, have over the past few months consistently received multiple offers from competing buyers and investors.

  5. Northstar says:

    That 6 month chart of the 5 year bond is only a quick snapshot of the bond market. It looks rather rosey until you compare it with the 5 year chart.

    http://www.bloomberg.com/apps/cbuilder?ticker1=GCAN5YR%3AIND

    The bond market is still in a major downtrend which hasn’t shown me any sign turning around. There’s massive resistance between 2 1/2 and 2 3/4 points. I guarantee that major lenders see this and won’t be too concerned until that level has been breached on a consistant basis.

    I could possibly see the bond market testing that level only to be knocked back down again. Therefore mortgage rates rising slightly only to be discounted again shortly after.

    IMHO

  6. “What were you thinking?”

    I wasn’t really thinking much at all. :) The weekly average is a bit noisy, but it might be interesting to see how the rolling average/median have developed over several years. I was just trying to understand what G was getting at, but not being very successful, I’m afraid. G, are you wanting to see several years worth of data on one X-axis?

  7. “With 156 data points for each year that’s represented I find the price graph to be a bit cluttered with just two years of data. I think if I introduced another nine lines it would be impossible to read.”

    I think you’re absolutely right. Do the weekly average, the six week average, and the four week median sale price have their own graphs with the last few years of data? I apologize in advance if this has already been addressed somewhere.

    Thanks for adressing the bond yeild issue- there has been a sharp selloff in recent weeks, but I’m not sure this will continue. There’s so many issues potentially affecting mortgage rates in the near future it’s tough to keep them straight!

    • Norm Fisher says:

      Hey Crikey,

      “Do the weekly average, the six week average, and the four week median sale price have their own graphs with the last few years of data?”

      No. I do have a weekly average going back to that start of ’07 but we’ve only done the others back to 1/1/08. You’ll probably recall that those were just added a few month back.

      What were you thinking?

  8. Builders are offering cars G? What planet are you living on?

    L.oki

    Not sure why the need to insult? I am merely mentioning a CBC report about incentives. I think similar incentives have been mentioned here as well.

    Norm: I am merely pointing out that if I look up stock prices, bonds or mutual fund prices etc…. I never see a year over year comparison. I seem to have hit a nerve with some ….sorry. You must admit that a year over year graph is far less dramatic than a graph which would have one, two or three years posted adjacent to one another.

    Armoth: thanks but I do read the graphs. Suggestion….”seek to understand”.

    Overall I think this site is the best blog I have seen however there are a few people who seem eager to attack whenever someone posts a comment or opinion they don’t completly agree with. Isn’t that what blogging is about….the freedom to post comments and opinions?

    • Norm Fisher says:

      G,

      You may have been perceived as being on the attack initially. The year-over-year discussion has been going on a long time and some people and it has often been misused, but it is an appropriate measure if the blanks are filled in.

      Stocks, bonds and mutual funds always post a yearly return, but you’re right that they go back much further.

      This post http://tinyurl.com/dyh3al contains the graphs you’re looking for, and you can expect to see them adjusted on a monthly basis in the future.

      The weekly posts are intended to be a quick market snapshot, and not a long term analysis. With 156 data points for each year that’s represented I find the price graph to be a bit cluttered with just two years of data. I think if I introduced another nine lines it would be impossible to read.

      http://www.normfisher.ca/images/teamblog/stats050909_avg.jpg

  9. Heather says:

    Thanks Norm,

    I just meant that the rate you see isn’t the whole story, but that you often only get to look at the fine print once you have the commitment documents in hand, so it takes some effort to even obtain this information, and then more to figure out if the lowest rate is really worthwhile. Sort of like shopping for airfare and cars.

  10. Norm Fisher says:

    Vinny,

    Good point. There was some kind of a disclaimer on that little promise. Also, bond yields have been climbing for five consecutive weeks so there is probably some risk that fixed rates could increase sooner rather than later.

    http://tinyurl.com/pja9u3

  11. I never fully trust the Bank of Canada on any announcements. They didn’t actually promise to hold the rate until next year. They just said they will likely hold the rate until next year, otherwise they wouldn’t have to make another monthly interest rate decision this June 4th. Yes they have some tools that will help them do this but think of all the times the governments say they won’t raise this tax and that tax.

    Last year around this time BOC said they were going to increase rates because of inflation. The very next month, sure enough they increased it. That was the last increase we have seen since.

    If you are going to time it, i wouldn’t try to wait until the very end because it might start going up before you get a chance to lock in. The flip side is that the economy could stay dismal even longer and you end up with a low rate even longer than just next year.

  12. Norm Fisher says:

    Hey Heather,

    I think there are pretty strong disclosure requirements on lenders and brokers today. With my last couple of mortgages I received some kind of a “disclosure statement” prior to signing which detailed terms, costs, pre-payment privileges and pay out penalties. I believe that’s a requirement today.

    Crikey,

    “They may still have their “hands full” with building homes in the entry- to medium-price range”

    Apparently, they’re building them without permits as well because housing starts are down close to 90%. :)

    “How much of the market are first-time buyers”

    It’s hard to know for sure. I’m sure that segment is strong right now but our last ten transaction look like this. 3 move ups, 5 buyers moving to S’toon (all previous home owners), one seller moving out, one first-timer. These are our ends of the transaction. Definitely some first time buyers on the buyer end of our listings (2).

  13. Norm Fisher says:

    Edmontonian,

    “The whole city looked dishevelled to say the least, with the roads in amazingly poor condition and dirt, dust, and garbage piled up on every street.”

    The snow doesn’t melt here in February like it does where you live. It’s only been gone a month and it’s still freezing some nights.

    I’ve heard from a property manager that there is downward pressure on residential rents. Moving is a drag, but your bro might want to look around. I expect he could probably do better. I’m at least certain that there are vacant units downtown that aren’t having much luck renting for $1200.

  14. Crikey,

    I would imagine there are quite a few first time buyers that are now entering the market when last year they were priced out forever. Funny, I did not know forever could mean a year. I don’t think there are many investors buying like the last couple of year. I think the sales numbers have a bigger % of first time buyers than the last while.

    Low rates and house prices dropping are helping.

  15. Edmontonian says:

    Nice to see condo prices dropping somewhat in Saskatoon. Unfortunately, it sounds like rents are doing the exact opposite as dillusional Saskatonians still think their city is worth a premium to live in. Just talked to my brother, who I am trying desperately to convince to move here out west, and he just got slammed with another $115 increase at his 1 bedroom apartment in Saskatoon Towers. He is now paying a little more than $1200 a month for his small suite. A bit OT, but does a boom in Saskatchewan terms mean that the condition of your roads and cleanliness of your city must resemble that of a third world country? I could not believe how bad the city looked when I was back during Mother’s Day weekend. The whole city looked dishevelled to say the least, with the roads in amazingly poor condition and dirt, dust, and garbage piled up on every street. As an added bonus, we also blew a strut out on our vehicle after hitting a particularily bad pothole. Not too sure where all you “boom” money is going, but it sure isn’t going towards maintaining the infrastructure or keeping your city clean. You could learn a lot from a trip to Edmonton or Calgary.

  16. jj,

    Oh dear. I’m not even sure where to start with Mr. CEO of the Homebuilder’s Association’s quote. They may still have their “hands full” with building homes in the entry- to medium-price range, but I’d wager this is largely due to people in this price range (first-time buyers) finding it easier to “afford” to purchase with our insanely low interest rates. Where would the market be if this wasn’t the case? Certainly you’d think he’d admit that sales in the medium to upper price ranges have slowed (and prices correspondingly have lowered) considerably due to *declining demand*.

    Norm, How much of the market are first-time buyers, and has this shifted at all from previously? Are there fewer move-up buyers? I found this interesting little tidbit, but it may not apply to this market:

    Home Sales: One and Done

  17. Heather D. says:

    Heather,

    It is TMG I’m going through. The best 5 year rate (3.49%) is with MCAP, but now we’ve decided to go with a variable at 3% instead (First National) since the BoC has promised to keep prime frozen until next year. Maybe by that time we’ll be able to get 3.25% fixed! :’) Good luck to you.

  18. A year-over-year drop of more than 10 per cent in the selling price of new homes in Saskatoon isn’t a sign of declining demand, says an official with a local home builders’ group.

    In fact, said Alan Thomarat, CEO of the Saskatoon and Region Home Builders’ Association, residential contractors have their hands full building homes in the entry- to medium-price range, a contributing factor in the slide of the price of new homes as reported by Statistics Canada on Monday.

    Selling price of new homes falls in Saskatoon

  19. Heather says:

    Thanks George! I always wonder about the terms when they beat out the competition by so much. Hidden fees? No pre-payment options?

    Amroth… if it’s a long while, I’m sure you’ve thought about just paying up and getting out, but if it’s not too long, did you know that you may be able to do an early renewal with no penalty (typically within 120 days of maturity) with your lender? Just make sure they’re offering a competitive rate (mine wasn’t).

    As for me, I’m probably going to go with a 1 year term only (2.9% with First National), despite some very tempting 5 year fixed rates, since I may be looking at moving out of the country for work, and mortgages don’t travel well. I’m hoping that by next year a variable will be worth thinking about again, but I’m not holding my breath.

  20. G,

    Settle down….and read the graphs

    At the spike in inventory,

    Wowzers least the spike wasnt as bad as last years

    Heather,

    I hope you get a wonderful rate im stuck with my 5.49% for awhile ~cries~

  21. Builders are offering cars G? What planet are you living on? I want on too.

  22. Norm

    Can you please explain why it seems like every time a realtor is mentioning increases the number quoted is the highest average price that was reached but when talking about declines I always hear the “year over year” figures. Why can’t we talk in terms of the highest price reached in Saskatoon compared with where we are now? No one thinks of their home worth one value in Feb and then another value in August….

    PS: I heard on CBC one analyst thought the decline in Saskatoon was far greater than the 11-12% mentioned due to all the “incentives given out by new home builders (ie: finished basements, cars, upgrades etc…)

    • Norm Fisher says:

      G,

      I’m sorry but I don’t think I’m understanding what you’re getting at. My weekly post has a near 18-month price history showing every blip and valley and my monthly reviews cover as much as five-years. There are 50 some pages on this site that show a ten-year history.

      When it comes to the general discussion, I just say what comes to mind. It might be unreasonable to expect me to recite the history of real estate prices every time I make a comment. :) I’ll assume you’re thinking about my comment regarding new house prices rising 45% in one year. Does that not provide some needed context when we’re talking about the past years declines?

      Year-over-year is the most standard measure when it comes to real estate, and that’s true when prices are rising or falling. It removes all “seasonal” considerations from the equation and seems to be viewed as the most accurate measure of change. Certainly, year-over-year figures don’t always provide the full story and it’s important to fill in the blanks. Up until just a couple of months ago someone wishing to spin a distorted story could have claimed that prices were up. If they didn’t mention the “year-over-year” qualifier someone could be easily misled. Three weeks ago, the year-over-year numbers showed pretty much the full extent of the declines. Around here, you get week-over-week, month-over-month, quarter-over-quarter, year-over-year and everything in between.

  23. Hi Dana,

    By “spin-free”, I merely meant that they presented the information without trying to tell us how to interpret it, which I find rather refreshing for a change.

    George,

    Wow, those rates! I loved your comment last thread about the “mother of all adjustable rate mortgages”. Unlike the US, almost every mortgage in Canada could be considered an ARM, I suppose.

  24. Heather,

    check tmg

    5 year 3.59%

  25. Heather says:

    Heather D,

    It sounds like you were offered a really good rate. May I ask who the lender is? I’m looking at renewing right now and the best 5-year fixed I’ve found is 3.89% from First National.

  26. Hey Crikey,

    I fail to see how the S-P article is “spin-free”. When looking at data in a year like 2008 without considering the underlying circumstances is very misleading. In a “normal” market an 11.2% decline should mean the market is crashing horribly!! But as Norm points out when you consider 2007 was up 45%, this likely indicates things stabilizing……

  27. Hey Steven,

    The article you posted about new home price drops mentioned month-over-month changes, but didn’t specifically mention what the YOY decline was. StatsCan has the info:

    http://tinyurl.com/q6dsf8

    For Saskatoon, MOM prices are down (-0.7), and YOY prices (March 2008 to March 2009) have declined by 11.2%.

    The S-P has a nice, short, spin-free online article about it:

    http://tinyurl.com/qfuov2

  28. High inventory, low sales, and price dropping is the direction that been around since May08.

    “For the year as a whole, the biggest declines were on the Prairies, with Edmonton, Saskatoon and Calgary registering the steepest year-over-year drop in new housing prices. Vancouver and Victoria have also seen big dips.”

    Story here.

  29. Heather D. says:

    Oh, I think there was some comment on your Twitter page. Must have misread it. Thanks Norm! :’)

    • Norm Fisher says:

      Hi Heather,

      The last million+ home sold was in March. I’m only good for one or two tweets a day so you don’t have to scroll back too far to be into some older info.

      Looks like we have a beautiful morning on the go. Have a good day.

  30. Heather D. says:

    $18K overbid? Ouch. Everybody knows by now it’s a buyers market, so to each their own I guess.

    Norm – did you say there was another million dollar sale this week? I’m surprised the avg sale remained at $279K!

    • Norm Fisher says:

      Heather,

      “$18K overbid?”

      there were actually two sales that averaged that in area 5, but again, they were both new homes and both had been for sale for awhile. I seriously doubt that there was a bidding war. Far more likely that some basement development or other improvements got worked into the deal.

      “did you say there was another million dollar sale this week?”

      No. Biggest sale this week was $542K but there were a half dozen other over the $400K mark.